CANADA FX DEBT-C$ charges to fresh 3-1/2 yr high, bonds mixed

TORONTO, April 21 (Reuters) - The Canadian dollar extended
gains to hit a fresh 3-1/2 year high on Thursday as part of an
across-the-board exit from the U.S. currency.

The Canadian unit jumped as high as C$0.9455 to the U.S.
dollar, or $1.0576, early in the day, the highest level since
November 2007.

The currency has climbed more than 2 percent since Tuesday
after Canada's annual inflation rate in March jumped to its
highest level since September 2008, ratcheting up pressure on
the Bank of Canada to resume raising interest rates soon.
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Having broken through the C$0.95 level, analysts say there
are few technical barriers in the way of the Canadian dollar.
Market observers say the currency could test its modern high of
C$O.9059 to the greenback, or $1.1039, reached in November
2007, according to Thomson Reuters dealing data.

"We're still in a pretty good uptrend. The Canadian dollar
is benefiting from the stampede into risk-seeking on the back
of a much weaker U.S. dollar," said Michael O'Neill, managing
director at Knightsbridge Foreign Exchange.

Trading volumes will likely thin out ahead of the long
weekend, but not before market participants see the February
figures for Canadian retail trade. The data is expected to show
a rebound in consumer spending after sales unexpectedly dropped
in January from December.

Analysts, on average, forecast a 0.6 percent increase in
overall sales for February and an increase of 0.5 percent
excluding auto sales. CARSLS=ECI ECONCA

At 7:55 a.m. (1155 GMT), the Canadian dollar CAD=D4 was
at C$0.9471 to the U.S. dollar, or $1.0559, up from C$0.9533 to
the U.S. dollar, or $1.0490, at Wednesday's North American
finish.

Canadian bonds were mixed ahead of the retail sales data,
while sentiment was also tilted in favor of riskier assets. The
two-year bond CA2YT=RR fell 3 Canadian cents to yield 1.823
percent, while the 10-year bond CA10YT=RR was up 14 Canadian
cents to yield 3.314 percent.